Failure to Assert Compulsory Counterclaim

|

Ex parte Hayslip, [Ms. 1180604, Dec. 6, 2019] __ So. 3d __ (Ala. 2019). The Court (Mendheim, J.; Parker, C.J., and Bolin, Shaw, Sellers, Stewart, and Mitchell, JJ., concur; Wise, J., dissents) issues a writ of mandamus directing the Tuscaloosa Circuit Court to dismiss New Pate, LLC’s 2018 action alleging a fraudulent transfer claim.

The Court first noted that “a petition for writ of mandamus is the appropriate vehicle for seeking review by this court of a denial of a motion to dismiss a counterclaim,” Ms. *14, and that

“‘Under the logical-relationship standard, a counterclaim is compulsory if ‘(1) its trial in the original action would avoid a substantial duplication of effort or (2) the original claim and the counterclaim arose out of the same aggregate core of operative facts.’ Ex parte Canal Ins. Co., 534 So. 2d 582, 584 (Ala. 1988) (quoting Brooks v. Peoples Nat’l Bank of Huntsville, 414 So. 2d 917, 919 (Ala. 1982)). In determining whether the claims ‘arose out of the same aggregate core of operative facts,’ this Court must determine whether ‘(1) the facts taken as a whole serve as the basis for both claims or (2) the sum total of facts upon which the original claim rests creates legal rights in a party which would otherwise remain dormant.’ Canal Ins., 534 So. 2d at 584.

Ms. *16-17, quoting Ex parte Cincinnati Insurance Companies, 806 So. 2d 376, 379-80 (Ala. 2001).

The Court held that New Pate’s fraudulent transfer claim asserted in the 2018 action was barred because it should have been asserted as a compulsory counterclaim in a prior action. The Court explained:

“The parties are the same in both actions. ... The facts serving as the basis of Pate and New Pate’s fraudulent-transfer claim in the present case have a logical relationship with the facts that served as the basis of Hayslip’s interpleader claim filed in Case No. CV-2014-901204; ‘the facts taken as a whole serve as a basis for both claims.’ Ex parte Cincinnati Insurance, 806 So. 2d at 380.”

Ms. *21-22.

Related Documents

Categories: 
Share To: